Expert: Shirley McAllister, CPP, PHR - 3/7/2008

Question
Hello Shirley,  I am helping my sister with her budget in Quickbooks.  We used last years info to create this years Budget, however...   We sell greeting cards.  We have a printing expense of $50k we'd like to put in as a budget line, but this goes to Inventory and Quickbooks has the COGS line in the budget too.  Aren't we double dipping if we have both COGS and the Printing Expense?  Can I eliminate the COGS line for this budget?  Also, half her pay is coming from a Draw.  As this is an Equity item and there is no place for it in the budget (which just includes Income and Expenses).  Should I just create a Payroll line for the sake of including it in the budget.  Is that an ok way to balance this out?

Thank you very much.    -Pete

Answer
If you want it added to the Cost of Goods than you put it in COGS, if you want it in Expenses than it is expenses out in expenses. You do not put in both.  Just put a zero amount in the COGS line for that account.

Can't you add a line that says Draw? It really is not payroll and you do not want anything to say payroll on your statement because than the IRS might want to know where the taxes are for that payroll and who the employee is. You can always make an adjusting entry against capitol I guess, but I would just put in a draw line.

Shirley